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U.S. stocks closed higher on Friday, marking the fifth consecutive day of gains and capping off a robust week for Wall Street. Investors brushed off disappointing consumer sentiment data and lingering inflation concerns to quite an extent. The S&P 500 added 5.3%, the Dow Jones advanced 3.4% and the Nasdaq rose 7.2% last week.
Technology stocks powered much of the rally. NVIDIA NVDA and Tesla TSLA shares surged last week, due to Trump's Middle East dealmaking tour. Saudi Arabia approved the use of SpaceX’s Starlink satellite internet service for aviation and maritime use. Musk also said he plans to bring robotaxis to the country. Meanwhile, NVIDIA will send 18,000 AI chips to Saudi Arabia.
Consumer Sentiment Slips, Inflation Expectations Rise
Despite the market's gains, economic data revealed persistent consumer unease. The University of Michigan’s consumer sentiment index fell to its second-lowest level on record. Moreover, consumers now anticipate prices to rise by 7.3% over the next year, indicating an increase from 6.5% the previous month.
Trade Truce Eases Investor Fears
Investor sentiment was buoyed by a 90-day tariff truce between U.S. and Chinese officials, calming fears of an escalating trade war. The agreement helped drive risk-on behavior and renewed confidence in the markets.
“Markets are repricing the stagflation risk right now,” said Jamie Cox, managing partner at Harris Financial Group, as quoted on CNBC. “The U.S. consumer may say he/she is worried, but they aren’t spending like they are. Consumption trumps all once you filter out all the noise.”
Looking Ahead: Tariff Uncertainty Remains
While the truce brought temporary relief, trade uncertainty looms. President Donald Trump announced that his administration will begin sending letters to various countries outlining new tariff rates within the next two to three weeks. These letters would replace direct negotiations in cases where time constraints exist.
Winning ETFs in Focus
Against this backdrop, below we highlight a few winning exchange-traded funds (ETFs) of last week.
YieldMax SMCI Option Income Strategy ETF SMCY – Up 27.6% last week
The YieldMax SMCI Option Income Strategy ETF seeks current income and exposure to the share price of the common stock of Super Micro Computer, Inc., subject to a limit on potential investment gains. Note that Super Micro Computer stock surged 36% last week. The ETF yields 86.72% annually.
STKd 100% MSTR & 100% COIN ETF APED – Up 25.9%
The STKd 100% MSTR & 100% COIN ETF seeks to achieve its investment objective by employing derivatives, namely swap agreements and listed options contracts, to gain long exposure to two underlying securities, MicroStrategy (MSTR) and Coinbase Global (COIN). MSTR shares lost about 5% last week while COIN shares jumped 27.5%.